1. Field of the Invention
The present invention relates to a two-vehicle financing program that considers the respective fuel economy of two vehicles, and the amount the two vehicles are driven, in determining a transportation cost and a financing program for the two vehicles combined.
2. Background Art
Automobile manufacturers and retailers are continuously seeking innovative ways to make vehicle pricing and financing more attractive to their customers. In conventional programs, vehicle manufacturers offer incentives directly to their customers to induce vehicle sales and leasing. The incentives may include cash rebates and low interest financing. Cash rebates are typically provided to the customer at the point of sale to reduce the net price of the vehicle. Low interest financing may be offered as an alternate or combined incentive. In other programs, vehicle manufacturers provide incentives to the automobile dealers. Dealer incentives may or may not be passed on to the customer.
With rising fuel costs, customers that currently own lower fuel economy vehicles, such as trucks and SUVs, are faced with an unexpected dilemma. The total cost to own their vehicle is higher today than the customers expected at the time of purchase when fuel costs were lower. For budgetary reasons, these customers may decide to sell or trade-in their current vehicle to obtain a more fuel efficient model, sacrificing the other advantages and comforts that their current vehicles offer.
The premature sale of vehicles can have a variety of negative impacts. First, the customers sell their vehicles early because of increased fuel costs—not because the customers are dissatisfied with the vehicles themselves. This may result in an undeserved reputation for the vehicle manufacturers that their vehicles are less desirable. Accordingly, new sales of the larger vehicles such as trucks and SUVs could decline, resulting in decreased revenue and overstocking. New vehicle overstocking, coupled with premature customer sell-offs, can saturate the market with larger vehicles, resulting in decreased residual values overall. Decreased residual values impacts both current vehicle owners, creditors and lessors. Vehicle owners (or dealerships in the case of trade-ins) will not be able to resell the vehicles for their actual value, resulting in a loss of equity and/or an increase in the number of debtors that default on their loans. In the case of leased vehicles, the lessors carry the same risk of decreased residual values, but on a magnified scale due to the number of vehicles leased and the residual risk associated with each individual vehicle. In short, it is in the best interest of vehicle owners, vehicle manufacturers, financiers and lessors to avoid the premature sell-off of vehicles due to increased fuel costs.
In many instances, customers have a dual use for the vehicles they own: commuting to and from work, and leisure/recreational activities. Commuting typically makes up a majority of the miles that a person drives his or her vehicle. Often, the advantages that larger vehicles offer (additional seating, payload, tow capacity, etc.) are not necessary for commuting to and from work. In contrast, the leisure or recreational activities that take place during the evenings, weekends, vacations, etc. often require the large vehicle amenities. Indeed, these amenities usually dictate the vehicle selection in the first place. However, the leisure and recreational activities typically consume a small percentage of the annual vehicle mileage.
As fuel costs rise, larger vehicle owners are paying an increasingly disproportionate amount to fuel their vehicles for commuting—an activity that does not typically require the amenities that vehicles having a lower fuel economy offer. Two solutions to this problem are currently available: replace the current vehicle with a more fuel efficient model, or purchase an additional “commute” vehicle that has a higher fuel economy. The first option is not attractive because it forces the vehicle owner to sacrifice the advantages of the larger vehicle (additional seating, payload, tow capacity, four-wheel drive, etc.), and may create significant negative financial impacts as described above. The second option is not attractive because it results in an overall increase in the monthly amount a customer pays for transportation.